City feasts on shares of online takeaway service company despite IPO priced at
the top of its range

Just Eat shares soared on their first day of trading on the London Stock Exchange, pushing the company’s valuation above £1.5bn as investors feasted on the online takeaway service.

Investor appetite for Just Eat, which is London’s biggest technology listing in eight years, means the company is now worth more than established takeaway rival Dominos Pizza and more than 100 times its underlying earnings of £14.1m.

The initial public offering listed shares at 260p, the top of its mooted price range, valuing the group at £1.47bn. Just Eat’s shares reached a peak of 297.96p yesterday, before closing up 8.85pc to 283p, valuing the group at £1.59bn.

David Buttress, chief executive of Just Eat said: “I believe that Just Eat is one of the most exciting global growth companies in Europe and we are all delighted at the strong levels of investor interest we have seen in our initial public offering. I believe that investors have recognised our track record of strong growth and that we have a strong platform for future growth.”

Just Eat operates in 13 countries and took over 40m takeaway orders last year from its 5.9m active customers.

Mr Buttress started Just Eat’s UK operation, which is now the company’s second biggest market by knocking on the door of Speedo Pizza on Commercial Road in East London and convincing them to sign up to the network.

He is now set to become a paper millionaire from the flotation.

Just Eat, which started in Denmark in 2001, is raising £100m to fund acquisitions to reinforce its dominant status in the online takeaway market. The rest of the £360m gross proceeds, or £387m if an over-allotment option is exercised in full, will go to investors SM Trust, Index Ventures, Vitruvian Partners, Redpoint Ventures, Greylock Partners, and certain executives, staff, former employees and early investors.

Just Eat is the first ever company to list on London’s new High Growth Segment. This allows companies to issue just 10pc of the shares when they float, instead of the normal minimum of 25pc.

The company said it expects a free float of 24.6pc - or 26.4pc if the over-allotment option is exercised in full. As a result, it is unlikely that Just Eat will stay on the High Growth Segment for long.

The UK government encouraged the London Stock Exchange to bring in the High Growth Segment to stop the exodus of UK technology companies listing in New York instead.

However more UK technology companies are staying in the US, and with the exception of Candy Crush maker King departing for the New York Stock exchange, more than 20 UK technology companies have listed in London, albeit the majority on Aim.

John Hammond, head of equity capital markets at Deloitte said: “This dispels the myth that there has been a flight of UK technology companies to the US. The number of new technology admissions to AIM over the last few years indicates that this market is doing its job as an incubator for UK companies. Indeed, with the IPOs of Servelec and Just Eat, it is also clear that UK technology companies of size are also viewing the main market as their listing destination of choice.”

Goldman Sachs and JP Morgan Cazenove are Just Eat's joint global coordinators on the float. Oakley Capital is co-lead manager and Torch Partners has advised the company.